Wednesday’s 3% fall by REA would make it appear likely to have been one of a number of funding vehicles used to buy into the $1.2bn carsales.com (CAR) capital raise. Unfortunately from a buyer’s perspective it’s still well above its recent low, we like this business and if it does surprise us on the downside when it reports on the 6th of August, this is one growth company MM would be happy to buy into further weakness.
The economic backdrop continues to look awful for REA with it being classified as a high valuation growth stock with exposure to an extremely nervous local property market but we shouldn’t ignore the stock’s 48% plunge over recent months and MM still believes it’s an accumulate on dips under $100 – another for the Hit List.
MM likes REA into further weakness $100 below
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